Income tax on salary (TDS)
Income tax on salary is collected a little each month, straight from pay — this is called TDS (Tax Deducted at Source). Webelio estimates the year's tax and spreads it across the months.
TDS (Tax Deducted at Source) is the employer's job under the Income Tax Act. You don't wait until year-end — you estimate each employee's yearly tax and deduct a slice every month. It isn't a flat percentage; it's a projection that adjusts as salaries change and employees declare their investments. Webelio does the whole calculation.
Does this apply to my business?
- Every employer who pays salary must deduct TDS where tax is due.
- Per employee: TDS only actually deducts money if that person's projected annual tax is above zero. Many employees earning up to about ₹12.75 lakh a year pay zero TDS under the new regime (see below), so for a lot of small teams, no tax is deducted at all.
You'll need a TAN (Tax Deduction Account Number) to deposit TDS. Enter it under compliance setup.
What Webelio does automatically
For each employee, Webelio:
- Projects their annual income from the current salary, plus any bonus, arrears or other income they declare.
- Applies their chosen regime (old or new) and the deductions they're entitled to.
- Works out the year's tax, then divides the remaining tax across the remaining months so each month's deduction is fair.
- Recalculates automatically when salary changes, a bonus is paid, or a declaration is updated.
- Compares old vs new regime for the employee so they can pick the cheaper one.
- Generates Form 16 (annual) and the data for Form 24Q (quarterly).
What you still must do
- Get a TAN and enter it in Webelio.
- Deposit the TDS you deducted to the government each month (by the 7th of the next month).
- File the quarterly return (Form 24Q) — you or your accountant, using the TDS data Webelio provides.
- Give each employee their Form 16 once a year.
Old regime vs new regime, simply
Every employee chooses one of two tax systems for the year. Webelio computes both and shows which is cheaper for them.
| New regime (default) | Old regime | |
|---|---|---|
| Standard deduction | ₹75,000 | ₹50,000 |
| Investment deductions | Very few | Many (see below) |
| Best for | People who don't claim big deductions | People with home loans, rent, big investments |
New regime tax slabs (FY 2025-26):
| Yearly taxable income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A rebate means anyone with taxable income up to ₹12,00,000 pays no tax under the new regime (about ₹12.75 lakh of gross salary once the standard deduction is counted). A 4% health-and-education cess is added on top of the tax, and a surcharge applies on very high incomes. Webelio adds all of this correctly.
Old regime deductions (the common ones Webelio supports):
- Section 80C — up to ₹1,50,000 for PPF, ELSS, life insurance, employee PF, 5-year FDs, children's tuition and more.
- Section 80D — health insurance premiums (₹25,000 for self/family, plus ₹25,000–₹50,000 for parents).
- Section 24(b) — home loan interest, up to ₹2,00,000.
- House Rent Allowance (HRA) — an exemption based on the rent you actually pay.
- Plus education-loan interest, extra NPS, savings-account interest and others.
Investment declarations — the yearly rhythm
Employees tell you what they plan to invest so you don't over-deduct tax early in the year. They do this in the employee portal.
- April (start of the financial year) — employees submit their planned investment declaration.
- Through the year — Webelio deducts monthly TDS based on what they declared.
- January–February — employees upload actual proofs in the proof window.
- February–March — Webelio recalculates on the verified proofs; any shortfall is recovered in the last months.
- After year-end — Form 16 is issued.
You control the declaration window and the proof window under Settings → Tax Declaration window. As HR, you review and verify the proofs employees upload.
An employee who joins mid-year can hand you a Form 12B from their previous employer. Webelio uses it to count the tax already deducted this year, so the remaining months are correct.
Form 16 and Form 24Q
There are two documents at the tax end of the year:
- Form 16 — the employee's annual tax certificate. It shows their salary, deductions and the tax deducted for the year. Webelio generates the detailed Part B in full. Part A (the record of tax deposited) comes from the government TRACES portal after you file your quarterly returns. Give each employee their Form 16 once a year.
- Form 24Q — the quarterly TDS return. It reports employee-wise salary and TDS to the government. Webelio prepares the figures for each quarter; you or your accountant file it on the portal.
Form 24Q quarters and due dates:
| Quarter | Months | File by |
|---|---|---|
| Q1 | April – June | July 31 |
| Q2 | July – September | October 31 |
| Q3 | October – December | January 31 |
| Q4 | January – March | May 31 |
Deposit the TDS you deduct each month by the 7th of the following month. Late deposit attracts interest — so pay on time even before the quarterly return is filed.
What's next
- Employee guide: My Tax — how employees declare investments and download Form 16.
- Compliance setup — enter your TAN and set the declaration and proof windows.
- Statutory reports & filing files — download the TDS summary for filing.